Falling palm oil prices increase pressure on sunseed and sunflower oil prices in Ukraine
Last week, prices for palm oil fell by 9.6%, and in total for two weeks lost 15.6% amid declining export demand.
According to surveyors, Malaysia reduced exports of palm oil products by 7.6-8.3% in December 1-20 compared to the same period in November, and in the next 10 days it will decrease even more amid the New Year holidays.
On the Bursa exchange on Friday, the February futures for palm oil fell by 1.6% to 4434 ringgit/t or 984 $/t (-9.6% for the week), and the benchmark contract for palm oil FCPO1 for delivery in March – by 1.64% or 74 ringgit/t to 4434 ringgit/t (983.24 $/t).
Following them and against the background of favorable weather for soybean crops in Brazil, January futures for soybean oil in Chicago fell by 7.8% to 870 $/t (-8.9% for two weeks).
According to Trading Economics, the average price of sunflower oil for delivery to buyers fell by 1.5% to 1261 $/t for the week (-3.6% for two weeks). the Number of proposals remains limited, as sellers are not willing to lower prices to the level of prices for soybean and palm oil and hope to restore the traditional premium for sunflower oil.
In Ukraine, the demand prices for sunflower oil for delivery to the Black Sea ports fell to 1070-1090 $/t, and to Bulgaria or Poland – to 1100-1150 $/t, but with delivery only in January – February. Currently, there is no acceptance due to market overcrowding and holidays.
Demand prices for sunseed fell by another 800-1000 UAH/t over the week to 24000-25000 UAH/t amid lower oil prices, but farmers are holding back sales and selling barley and corn, whose prices continue to rise.
In anticipation of market stabilization and increased supply of sunseed, the plants stopped processing or switched to soybean processing.
Ukroliyaprom calls on farmers to speed up sales of sunflower, as experts believe that sunseed prices in Ukraine are unreasonably high. While prices for sunflower oil on the world market increased by 130 USD/t over the year, sunflower prices rose by almost 250 USD/t during this period.
The Association reminds that sunseed is not a crop that determines price trends. The formation of prices in the world oilseed markets is most influenced by palm and soybean oil, the share of which in world production is 40% and 30%, respectively, while the share of rapeseed oil is 15%, and sunflower oil – only 9%.
The decline in sunflower oil production on the global market is partially offset by soybean oil, which has recently become the cheapest and continues to lose in price. Therefore, the increase in the world soybean crop in the current season will lead to the adjustment of prices for all types of oils, in particular, it may reduce the prices for sunflower oil, – said the association.
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